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7/27/2011 5:47AM

Euroview: UK Choice, Austerity Or Bond Bust

The UK economy is struggling. Opponents of the government blame its austerity program. But fiscal stimulus wouldn't necessarily get the economy going again. Instead, it might trigger a bond rout and Bank of England rate hikes.

This transcript has been automatically generated and may not be 100% accurate.

... the UK economy struggling ... latest data show that a group y'know point two percent in second quarter ... OK so one off factors like the Royal Wedding and supply disruptions from the Japanese earthquake and tsunami probably depressed these numbers ... even without these factors keep its performance would look Rob Prana economy coming out of the deepest recession since the second World War ... opponents of the government blamed its austerity program fiscal stimulus would give the economy going again ... what it though ... Bank of England is already feeling the heat about allowing inflation to remain ... more than double its two percent target ... that's only because the government promises to maintain a tight fiscal policy ... backsliding on its cuts and tax increases would almost surely force the bank and tightening monetary policy ... to prevent inflation from becoming embedded ... even words it is that I was that investors would start to lose faith in the UK bond market ... and all that would make Britain look a lot more like Ireland ... this is our not that redoubt Jones Newswires ...